Seán Sherlock (Cork East, Labour)
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Question 607: To ask the Minister for Agriculture, Fisheries and Food if he supported the current support level of 20 cents per litre for milk; and if he will make a statement on the matter. [30129/10]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The EU Common Agriculture Policy (CAP) provides a range of support measures that can be used to manage the dairy market, and these were modified in the CAP reforms of 1999 and 2003. In the Health Check negotiations in 2008 there was pressure to remove or weaken the support measures significantly. At that time I fought hard to keep the key market instruments in place and the importance of the retention of these support measures was proven in 2009 when the dairy market experienced a dramatic decline. Last year I frequently pressed the Commission to take all appropriate measures to deal with the dairy market situation, and there is no doubt that the implementation of the range of support measures helped to stabilise the market in 2009. I will continue to maintain close contact with the EU Commission and the Council to ensure that support measures are activated at levels that will make a real impact on the market.

Dairy farmers incomes are comprised of the market price paid for milk and direct income support from the EU. In Ireland the average producer milk price in 2009 was 24.1 cent/litre, and the dairy premium is 3.6 cent/litre. Market forces have a major influence on the price paid to farmers for milk. World market prices determine the returns received by dairy processors and these in turn are reflected in the price paid to farmers. In essence, farm gate prices normally reflect the returns from international markets of dairy product sales.